The hides and skins trade of South Africa
What drives the hides and skins market?
Most wet salted hides produced in SA are processed by local tanneries either to finished leather, or to be sold as ‘wet blue’. This is when the hair has been removed and the skin tanned, but not yet dyed or given any leather properties. Wet blue prices are determined internationally.
Most wet salted hides end up as car upholstery or shoe leather. If brokers can export hides or skins for more than they can get locally, they will do so. Most dry hides are exported, but are generally of low quality, as they often come from animals that have died on farms, or have been slaughtered in rural areas and are not salted or preserved in any way. Overseas buyers determine the price.
There’s renewed talk that government wants to ban the export of unprocessed raw hides. What is your opinion on this?
Several countries do this with the aim of creating more jobs locally. The downside for the farmer is lower prices, as all hides, irrespective of quality, will then have to be processed. This will cost the tanneries money, as many skins may not survive processing. Consequently, the price of lower quality hides or skins, especially dry hides, are likely to decline.
How do you view the recommendation by the Department of Trade and Industry to introduce an export levy of 60% on wet exports and 40% on semi-processed hides and skins?
The latest information is that sheep skins will not be subject to the export tax. But, that aside, if the tax is implemented, not all hides and skins will suddenly be processed to finished leather. Businesses exporting unprocessed or semi-processed products will probably reduce the price they’re prepared to pay as the tax on top of existing input costs will make our raw material too expensive on the global market.
The tanneries will end up paying the tax, taking it from money that should have gone into the farmer’s pocket. The proposed export tax will place a premium on good quality hides and farmers will benefit by paying more attention to the proper salting of any hides that they handle. But many rural people who slaughter for traditional purposes often do not salt these hides, so they will be badly affected by the new legislation.
What role can hides and skins play in creating jobs, particularly in rural areas?
As tanneries need very expensive equipment and use lots of water, setting up smaller ones in rural areas isn’t easy. It’s no good buying a R2 million machine and having it stand idle most of the day. Tanneries making good profits are those that have been in business for a long time with an established client base.
Most large tanneries are close to cities, where water as well as a sewerage system for the disposal of the waste water is available. Hides and skins are transported here from a network of collection points around the country. There is, however, a huge wastage of hides and skins.
This opens opportunities for small entrepreneurs who have a bakkie to collect these skins on a regular basis and take them to the brokers. The money paid for these skins would be a direct injection into the community. Currently, many skins are simply thrown away because farmers don’t believe its worth the effort to treat them properly. Salt isn’t expensive.
What’s the potential for leather crafts in rural areas?
Those wishing to try this must study their target market. Are there enough tourists in the area? What will differentiate their product from items available from city shops? Will the workmanship be of a high quality? Crafters also wrongly believe they have to make the leather themselves. This is a mistake many state-sponsored projects make. Don’t spend millions on a small tannery when you can buy in high quality leather at a fraction of the cost from an existing tannery.
What types of raw product have the most scope?
Merino skins, especially with wool, are fetching record prices. Dorper skins are always in demand overseas. There’s very little local processing of Merino skins, so most are exported, salted and processed overseas. Most Dorper skins are exported in the pickled state, where the wool has been removed and then placed in an acid-and-salt solution. These are exported to countries that process them further into leather for jackets, skirts and trousers.
One of the biggest threats to the supply of sheep skins is the decline in sheep numbers on farms due to predators and stock theft. Some local sheep skin tanneries have experienced a noticeable decline in the availability of sheep skins. SA is still the largest producer of ostrich skins, but ostriches are farmed differently to sheep, goats and cattle, as emphasis is placed on ensuring a skin of the highest quality.
The recent avian influenza outbreak will have a huge impact on the ostrich industry in the next few years as availability of skins will become a problem due to many breeding birds being destroyed. Angora goat skins tear easily. This limits their use for items such as inner soles. Boer goat skins make good leather, but there’s little local demand, so most skins are exported.
What about game skins?
Most kudu skins are processed into upholstery leather. Kudu leather tends to have thorn scratches, but clients often like this, as it gives the product character and a natural look. Once again, salted skins that are still wet will receive a better price than a dried skin. Drag marks seriously downgrade the skins. Springbok skins are always in demand. Prices fluctuate, but are usually two to three times higher than impala, blesbok or similar size skins.
What does the International School of Tanning Technology (ISTT) do?
ISTT offers several different training courses. Most are aimed at the existing formal tanning industry, or hides and skins brokers who have started their own tanneries to add value to the skins they collect. Our short course on game skin tanning has been well-received by farmers and taxidermists. It’s a practical course aimed at beginners who want to tan their own hair-on game skins. ISTT also offers a consultancy service to businesses.
Contact the International School of Tanning Technology on 046 622 7310, or email [email protected]
This article was originally published in the 16 March 2012 issue of Farmers Weekly.